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 Arbitration-Decision, Judicial Review Amenable to Process
(Aguilar v. Lerner)

Arbitration-Decision, Judicial Review-The a Statutory Rights Exception
(Aguilar v. Lerner)

A.  Judicial Review

When parties choose to forgo the traditional court system and arbitrate their claims, it is assumed they wish to have a final and conclusive resolution of their dispute.  The Legislature has recognized this underlying assumption of finality and has, by statute, limited the grounds for judicial review of an arbitrator’s award.  (Code Civ. Proc, § 1286.2.)  Consistent with this legislative intent, we recognized the general rule that “an arbitrator’s decision cannot be reviewed for errors of fact or law.”  (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11 (Moncharsh).)  We explained that because the Legislature has provided certain statutory grounds to overturn or modify an arbitrator’s decision, courts should not subject such decisions to standard judicial review.  (Id. at pp. 26, 27-28.)  In addition, however, to the statutory grounds for vacating an arbitrator’s award, we explained in Moncharsh “that there may be some limited and exceptional circumstances justifying judicial review of an arbitrator’s decision . . . .  Such cases would include those in which granting finality to an arbitrator’s decision would be inconsistent with the protection of a party’s statutory rights.”  (Id. at p. 32, italics added.)  It is this exception on which plaintiff relies in seeking judicial relief from the arbitrator’s award.

We applied the statutory rights exception to the rule of arbitral finality in Board of Education v. Round Valley Teachers Assn. (1996) 13 Cal.4th 269 (Round Valley).  In that case, a school district notified a probationary teacher it would not renew his teaching contract for the next year.  He sought arbitration as authorized pursuant to the applicable collective bargaining agreement, claiming the district had failed to provide him with notice of nonreelection as required in the agreement.  The teacher prevailed in arbitration, and the district thereafter petitioned to vacate the arbitration award, claiming the notice required by the collective bargaining agreement was contrary to the requirements set forth in Education Code section 44929.21 and certain provisions of the Government Code.

On the question of judicial review of the arbitrator’s decision, we explained:  “Although we adhere to our holding in Moncharsh that arbitrator finality is the rule rather than the exception, we agree that—if District is correct concerning the scope of its statutory rights under the Education and Government Codes—this case presents the exceptional circumstance that allows for judicial review of the arbitrator’s decision.  Should District’s interpretation of the law prevail, we would be faced with an ‘explicit legislative expression of public policy’ that issues involving the reelection of probationary teachers not be subject to arbitration.  [Citation.]  This expression of public policy would thus conflict with the expressed legislative intent to limit private arbitration awards to statutory grounds for judicial review.  Thus, rigidly insisting on arbitral finality here would be ‘inconsistent with the protection of a party’s [i.e., District’s] statutory rights.’ ”  (Round Valley, supra, 13 Cal.4th at p. 277.)

Like the school district in Round Valley, plaintiff relies on statutory rights he claims will be infringed by limiting judicial review of the arbitrator’s decision in this case.  He contends the arbitrator exceeded his powers in resolving the parties’ dispute because the agreement to arbitrate contravened both plaintiff’s statutory rights as set forth in the MFAA and the public policy underlying the statute.  We agree that enforcement of an arbitration agreement that violates a plaintiff’s rights under the MFAA would exceed the arbitrator’s powers.  Consequently, judicial review of the arbitrator’s decision here is appropriate.  We thus turn to the merits of plaintiff’s claims.  Aguilar v. Lerner 4/22/04 SCS099667 judicially estopped
 

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